Government plans to boost rural housing ‘will not improve affordability’

Outline plans by the government to boost rural housing will not improve affordability, experts have warned.

Chancellor George Osborne and environment secretary Elizabeth Truss announced on Thursday that the government’s starter homes scheme would be extended to rural areas as part of a new 10-point rural productivity plan.

They claimed that factors including increased access to internet broadband and families escaping cities had led to a net internal inward migration of more than 60,000 people a year to rural areas in England.

Among the policy pledges, announced in a joint article for a national newspaper, were commitments to review planning laws in rural areas and, crucially, widen the 20% discount scheme for new home buyers.

The ministers argued the initiatives would support a rural economy that is now worth £210 billion a year.

The ministers said: “In a recent survey of rural businesses the main barrier to growth that most identified was planning restrictions. So for a start, we’ll review rules around agricultural buildings such as barns to allow rural businesses to expand more easily.

“And if we are going to attract and maintain a dynamic workforce, we need to make it easier for people to stay in their rural communities and for newcomers to settle there too. We’ll always want to protect our green belt and beautiful natural environments, but the lack of housing in rural areas is a scandal.

“So we will reform planning laws, making it easier for villages to establish their own neighbourhood plan and allocate land for a small number of new homes.”

Timing of the article has been carefully planned; the Conservative Party conference in October and the Spending Review in the autumn are the next two opportunities for the chancellor to set out his policy direction for the next parliament.

Though the admission that rural housing pressures are a significant issue was welcomed, the government was warned by experts that simply cutting prices for some buyers was not enough.

Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: “Extending the starter homes scheme will help some people, but we do have some concerns about how the 20% discount will be achieved.

“Rural areas need more homes of all tenures, not just for home ownership – we think exempting areas with a population of fewer than 3,000 people from right to buy would help protect the dwindling supply of affordable homes in rural communities.”

John Rowley, planning officer at the Campaign to Protect Rural England (CPRE), said that creating good quality homes in sustainable communities was the way forward: “The proposals set out in the Rural Productivity Plan risk alienating local communities and reducing the amount of affordable housing in rural areas. The government’s suggestion that young families will be able to afford houses at even 20% discount will not ring true in many low-waged rural economies.

“Rural housing should be provided to meet identified local need. It’s likely that commuters will be able to outbid local families. And the 20% discount which the purchaser of the property will benefit from will not remain in perpetuity. The result will be that there is no incentive for local people to support this type of development.

He added: “The proposed extension to the Right to Buy to include housing association properties will also add to this problem. Rural areas should be exempted from the extension to Right to Buy in order to protect the already dwindling stock of affordable homes available.”

The government’s political opponents were quick to seize on the idea of subsidies for commuters hoping to downsize.

Steve Reed, the Labour shadow local government minister, said: “The government says it wants to build starter homes in rural areas but it seems these will replace affordable homes to buy and rent. Starter homes should be additional to affordable housing supply not instead of it.

“In many rural areas buying or renting a home has become increasingly unaffordable. Yet the government has undermined the provision of affordable housing at every step by watering down requirements on developers to build new affordable homes.”